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Charles Sizemore: Amazon About 'to Upend the Grocery Industry'

By Frank McGuire   |   Thursday, 13 Oct 2016 01:50 PM

 


Newsmax Finance Insider Charles Sizemore told Newsmax TV that Amazon is about to "upend the grocery industry" as it plans to expand its grocery business with shops that let people quickly pick up milk, vegetables or other perishable foods.

"Amazon is trying to get your grocery dollars for a very good reason,”  Sizemore told Newsmax Prime’s JD Hayworth.

“Groceries, while they are a low-margin business, it's still something that every American pays for, usually on a weekly basis. If you're already buying your groceries at Amazon, you might also buy something that's higher margin,” he said.

"Amazon's smart, they know what they're doing here," he explained. "I have a feeling they're about to really upend the grocery industry. It's about to get really interesting. It's just not quite what everyone's expecting."
 

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The Wall Street Journal cited unnamed sources as saying Amazon will open real world shops to augment its Fresh subscription service that lets members order groceries for delivery.


Seattle-based Amazon intends to open small stores stocked with perishable items, and where shoppers can use smartphones or perhaps touchscreen stations to order longer lasting items such as canned goods for same-day delivery, according to the Journal.

Amazon will add drive-up locations where grocery orders will be brought to cars, and is working on technology to automatically read license plates to speed the process, the Journal reported.

Sizemore said such a strategy is pure genius. “I don't really want raw chicken sitting on my front porch waiting for me to come home in the evening. It makes a lot more sense if you have something like a physical location where I could order it online, I could pick it up on my way home,” said Sizemore, chief investment officer of the investment firm Sizemore Capital Management and the author of the Sizemore Insights blog.

Highlighting a wide-ranging interview, Sizemore touched on many hot business topics of the day:

  • Wal-Mart Raises Entry-level Manager Salaries Ahead of Overtime Rule. “By raising those salaries, they're avoiding the potential overtime pay rules that are going into effect,” Sizemore said. “So the way it is now with the overtime rules that go into effect, a lot of those Wal-Mart managers would be eligible for overtime. By just raising their salaries, Wal-Mart's better able to budget it. They know ahead of time roughly what their expenses are going to be.”
  • Samsung Kills Galaxy Note 7 After Global Recall, New Fires. “You know it's bad when they're actual making fireproof boxes to send the phone back. Samsung's having to go to that level actually making a fireproof box in order to return the item. It's bad, it's a bad headline, and it's definitely going to affect their profitability for the next quarter or two. That's inescapable,” he said. “I don't know that it's going to have this long-term impact. I think it'll be a really rough quarter or two, they'll definitely take a bath on their earnings.”
  • Apple Stock Hits Highest Since December on Samsung Note 7 Fire Crisis. Sizemore said Apple just might see a boost from the Samsung fiasco. “You might see a small jump in the iPhone 7 Plus, the larger iPhone. There may be a slight bump there but I don't know that it's going to be something that would translate to multi-year success. I'm long Apple, I actually like the company a lot, I think it's very reasonably priced. That said, I don't know that this particular incident with Samsung is going to be a windfall.”


 

(Newsmax wire service AFP contributed to this report).

 

Charles Lewis Sizemore, CFA, is chief investment officer of the investment firm Sizemore Capital Management and the author of the Sizemore Insights blog. To read more of his work, CLICK HERE NOW.

 

 

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Charles Sizemore predicts that Amazon is about to "upend the grocery industry" as it plans to expand its grocery business with shops that let people quickly pick up milk, vegetables or other perishable foods.
charles sizemore, amazon, grocery, delivery
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